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Question

Ram Prashad keeps his books on Single Entry System and from them and the particulars supplied, the following figures were gathered together on 31st March, 2018:
Book Debts ₹ 10,000; Cash in Hand ₹ 510; Stock-in-Trade (estimated) ₹ 6,000; Furniture and Fittings ₹ 1,200; Trade Creditors ₹ 4,000; Bank Overdraft ₹ 1,000; Ram Prashad stated that he started business on 1st April with cash ₹ 6000 paid into bank but stocks valued at ₹ 4,000. During the year he estimated his drawings to be ₹ 2,400. You are required to prepare the statement, showing the profit for the year, after writing off 10% for Depreciation on Furniture and Fittings.

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Solution

Books of Ram Prashad

Statement of Affairs

as on March 31, 2018

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Trade Creditors

4,000

Book Debts

10,000

Bank Overdraft

1,000

Cash in Hand

510

Capital (Balancing Figure)

12,590

Stock

6,000

Furniture and Fittings

1,200

Less: 10% Depreciation

120

1,080

17,590

17,590

Statement of Affairs

as on April 01, 2017

Liabilities

Amount

(Rs)

Assets

Amount

(Rs)

Capital (Balancing Figure)

10,000

Bank

6,000

Stock

4,000

10,000

10,000

Statement of Profit or Loss

for the year and March 31, 2018

Particulars

Amount

(Rs)

Capital as on March 31, 2018

12,590

Add: Drawings

2,400

14,990

Less: Capital as on April 01, 2017

(10,000)

Profit made during the year 2017-18

4,990


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